Correlation Between DBS Group and Endeavour Mining

Can any of the company-specific risk be diversified away by investing in both DBS Group and Endeavour Mining at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining DBS Group and Endeavour Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DBS Group Holdings and Endeavour Mining PLC, you can compare the effects of market volatilities on DBS Group and Endeavour Mining and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in DBS Group with a short position of Endeavour Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of DBS Group and Endeavour Mining.

Diversification Opportunities for DBS Group and Endeavour Mining

0.48

Correlation Coefficient

DBS Group  Endeavour Mining

Very weak diversification

The 3 months correlation between DBS and Endeavour is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding DBS Group Holdings and Endeavour Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Mining PLC and DBS Group is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on DBS Group Holdings are associated (or correlated) with Endeavour Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Mining PLC has no effect on the direction of DBS Group i.e., DBS Group and Endeavour Mining go up and down completely randomly.

Pair Corralation between DBS Group and Endeavour Mining

Assuming the 90 days trading horizon DBS Group Holdings is expected to generate 0.52 times more return on investment than Endeavour Mining. However, DBS Group Holdings is 1.93 times less risky than Endeavour Mining. It trades about 0.19 of its potential returns per unit of risk. Endeavour Mining PLC is currently generating about 0.01 per unit of risk. If you would invest  2,742  in DBS Group Holdings on April 21, 2025 and sell it today you would earn a total of  447.00  from holding DBS Group Holdings or generate 16.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

DBS Group Holdings  vs.  Endeavour Mining PLC

DBS Group Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DBS Group Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, DBS Group reported solid returns over the last few months and may actually be approaching a breakup point.

Endeavour Mining PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Endeavour Mining PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Endeavour Mining is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with DBS Group and Endeavour Mining

The main advantage of trading using opposite DBS Group and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DBS Group position performs unexpectedly, Endeavour Mining can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Endeavour Mining will offset losses from the drop in Endeavour Mining's long position.

The idea behind DBS Group Holdings and Endeavour Mining PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.